In a continuing effort to bridge theirdominance from the home video rental market into thenext-generation entertainment field, Blockbuster announcedthat it has entered into an agreement with next-gen darling Atom Filmsto syndicate short-form content from a co-branded section ofblockbuster.com for two years beginning this spring. Last monththe Viacom subsidiary announced a slate of deals: a video-on-demandalliance with personal TV company TiVo, a strategic alliance withAOL to create broadband content and delivery services, and an agreementwith Metro-Goldwyn-Mayer Inc. to develop a business model fordelivering their films online. The partnership, which constitutesan under $10 million investment in Atom Films, also includesstreaming related technology. Reflecting on her company's newdirection, blockbuster.com president Shellye Archambeau stated,"this announcement is an exciting next step for Blockbuster as wecontinue to pursue avenues for our customers to receive quality,in-home entertainment through electronic delivery."

In a battle that continues to heat up, software giant Microsoft announced last week the release of new product to that allowscompanies to sell pay-per-view and pay-per-download content viathe Internet. The Digital Broadcast Manager is Microsoft's newestplay in their effort to replace RealNetworks' technology as theleading digital media standard in favor of their own Windows Mediatechnology. Developed over the past several years in cooperationwith House of Blues Inc., and e-media, Showtime Boxing's Webbroadcaster, Digital Broadcast Manager features easy digital mediaconversion, customer authentication and authorization, a reportmanager that tracks customer and product sales trends, and digitalmedia storefront management. While digital media ecommerce is newto Microsoft's offerings, competitor RealNetworks has offeredpay-per-view services since they released Real Server 5 way backin 1997. Noting the late entry, RealNetworks product managerstated in a recent Industry Standard article, "this is anotherexample of Microsoft trying to keep up with the market leaders,but remaining several generations behind".

>> AOL Sneaks AOL TV

Going head-to-head with Microsoft's WebTV service, this weekAmerica Online unveiled their much-ballyhooed interactive TVproject, AOLTV, to members of Wall Street's elite. The new servicewill center around a set-top box from Phillips Electronics which willbe available in stores and promoted through the AOL service thissummer. In his report released on the new project, Merrill Lynchanalyst Henry Blodget stated that AOL TV will be "a profoundlyimportant next step in the development of the medium and AOL."Commenting on the pricing structure, Blodget speculated that"the user will likely be able to buy the box for $199-$399 andthen pay a $5-$10 monthly fee in addition to the regular AOLsubscription fee, or just pay a higher monthly subscription feeand get the box for free". AOL TV will feature an electronicprogramming guide, similar to the one offered by DirecTV, thatallows users to change channels by clicking on words and graphicsinstead of clicking through channels and also renumbers channelsinto groups defined by subject matter (i.e. sports, news, etc.).Users will also be able to watch TV while using the interactiveelements they are used to on their PCs such as instant messaging,buddy lists, chat, email and a calendar. These new elements willeither appear in a translucent form or augment the size of thetelevision image while they are being used. The new service willalso allow for direct interaction with programming. According toBlodget's report, "on Larry King, for example, users might beasked to vote on a particular political issue while the guest isbeing interviewed".

>> Akamai Gets Serious about Streaming

On the delivery side of the next-gen industry, Akamai Technologies has agreed to acquire streaming media piorneer InterVU in a dealestimated to be worth $2.8 billion. The addition of InterVU willincrease Akamai's server space to more than 3,000 in 100 networksacross 40 countries. While Akamai has made some advance into thestreaming world with Apple's Quicktime TV, the acquisition increasestheir services to include the streaming of Microsoft Media andRealNetworks formats. Both companies specialize in the dependable,high-performance delivery of rich Web content by placing serversin Internet service providers networks, reducing Net congestion bybringing the source closer to the inquiry. Last month, Akamaialso bought Webcasting toolkit and service company, Network24Communications.